See the update at the bottom of this article.
Apple supplier Pegatron is rumored to be increasing its China-based workforce by 40 percent in the second half of the year, in a move which potentially suggests that an anticipated low-cost "budget" iPhone handset is about to enter its mass production stage of development.
The news reached us from Reuters, who goes on to note that according to Pegatron's chief financial officer Charles Lin, 60 percent of the company's 2013 revenue is expected to come from work undertaken in the second half of the year. Lin declined to comment, however, on whether this portion of Pegatron's revenue would be the result of a low-cost iPhone production deal.
Reuters continues:

"Making the cheaper iPhone will further help Pegatron's operating margin because its plastic casing is easier to make than iPhone 5's metal casing; this should ensure a good yield rate," said Fubon Securities analyst Arthur Liao.